Li & Fung Ltd. (00494.HK), the sourcing company that supplies clothes and toys to retailers worldwide, said it agreed to sell its distribution unit LF Asia to Dah Chong Hong Holdings Ltd. (01828.HK) for about US$350 million.
The sale is part of Hong Kong-based Li & Fung’s efforts to simplify its businesses and focus on trading and logistics, Bloomberg reports.
The deal is expected to close by the end of next month, and the proceeds will be used for working capital and to strengthen its capital structure, Li & Fung said in a statement Tuesday.
Dah Chong Hong (DCH), a Hong Kong-based cars-to-food-and-logistics conglomerate that is a majority-owned subsidiary of CITIC Ltd. (00267.HK), said in a separate statement the acquisition of LF Asia will expand its own consumer business and create a better balance between its motor and consumer products.
LF Asia distributes consumer and healthcare products across Asia.
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